The new service, to be launched by the end of 2010, will use technology developed by DigiMo to enable Israeli consumers to make payments at the point-of-sale with their mobile phone using their choice of an NFC phone, a sticker attached to their existing phone or a 2D barcode.

DIGIMO: The system uses on-screen barcodes, contactless stickers or NFC (Click to enlarge)

Israeli mobile commerce, payments and marketing specialist DigiMo Group has announced it has added support for NFC phones and stickers to its barcode-based mobile payments system.

The system is believed to be the first in the world to allow payments to be made at the point-of-sale using either near field communication or mobile barcodes and has been developed at the request of one of Israel’s largest banks.

The bank, whose identity is being kept under wraps for now, has now completed its technical testing of the new solution and plans to commercially launch the system in several cities in central Israel before the end of 2010, Yossi Yarkoni, DigiMo’s CEO, has told NFC World.

Customers will need a 2.5G or 3G phone in order to make payments using the mobile barcode option, Yarkoni adds, while other customers will be able to pick up an NFC sticker from their bank branch.

Merchants with an existing barcode reader will not need to install any new hardware in order to accept payments via mobile barcode while those without a barcode reader, and those wishing to support NFC payments will be able to install a simple NFC reader that connects directly to their electronic cash register. Some twenty retail chains and around fifty independent retailers will accept the new payments solution from day one.

The bank then plans to take the system national, once the first 30,000 stickers have been distributed and the system is fully up and running.

There are two major advantages to the solution, Yarkoni says. The first is that “full coverage can be achieved with minimum investment in infrastructure. In the barcoded market no investment is required at all. In other places, NFC readers will be installed to support the service launch as well as any future needs.” The second advantage is that “customers with older phones that do not contain an integral NFC device can also be part of the target audience to use the new payment service and enjoy all the benefits of mobile payment, thanks to an add-on attached to their cell phone.”